Gone are the days when more money meant additional interest from candidates. Companies are quickly realizing that, in order to effectively attract and retain quality employees, they must redefine their offering to ensure they are paying attention to what employees really want in the area of compensation.
A competitive compensation package has been considered the cornerstone of corporate recruitment and retention strategies for many years. Organizations invest extensive resources, time, and research into developing compensation packages that are relied upon and promoted extensively to attract and retain top talent.
Ask any company about their compensation package, and they will provide a perfectly polished and corporately correct statement, outlining their competitive offerings, including industry-leading salary, performance-based bonus, comprehensive benefit plan, and opportunity for growth and development. With every company seeming to offer a variation of the same compensation package, it is safe to say that it is competitive, but is it effective? More importantly, is it strategic and sustainable?
The disconnect between what employers are offering and what employees really want has resulted in the need for companies to redefine their compensation strategy and focus on non-financial aspects that address culture and quality of life.
Surprisingly, money is much less a motivator for today’s employees than most employers think. Employers need to focus less on matching what their peers are offering and more on creating a culture that sets them apart, thus enabling them to stand out as an employer of choice.
Money still matters—and always will. Ensuring that an organization has a competitive financial offering is a great foundation. However, the best way to maximize motivation through money is to offer just enough so that the monetary component of a compensation package is neither a game-changer nor a sticking point. While some companies may attract employees with industry-leading pay, this often results in a transient workforce, lacking in both loyalty and a sustainable competitive advantage.
Providing employees with the security of a fair salary is important, so that they can stop worrying about money, and focus on performing within a position and for the company they love. Leveraging a unique and progressive corporate culture on top of a foundation of equitable pay is a strategic solution for attracting and retaining the right people to grow an organization.
Corporate culture is the key to developing a sustainable advantage in recruitment and retention. Employees care most about the people they work with, their relationships with their managers, and whether the goals and values of the company are aligned with their own. Asking employees what a positive work environment means to them, and incorporating their feedback into the way a business is operated encourages employee engagement.
Being involved, being respected, and being recognized as a valuable team player will retain employees, and they will recommend the organization to other talented professionals.
An established career path and a company that puts its money where its mouth is to foster a continuous learning environment speaks volumes to employees. Whether it is on-the-job training, continued education opportunities, or leadership development and coaching, the return on investment from employee development is unparalleled. Providing learning and advancement opportunities for employees are strategic components of total compensation that will attract, develop, and retain top talent.
Flexibility is the final factor of total compensation that employers need to recognize. One size does not fit all; employees appreciate a company that recognizes them as unique and tailors their compensation accordingly. Flexibility goes a long way when it comes to benefit packages, work hours and schedules, office environment, and even the dress code.
Allowing for flexible office hours so employees can skip rush hour or trusting employees to work remotely provides greater work-life balance, and instills confidence and output. Providing a benefit package that offers more customization than comprehension demonstrates that a company cares about the individual needs of each employee, while remaining cost conscious. Nurturing a work environment that reflects the values of employees, whereby enabling them to openly communicate their individual or common interests, will foster a caring culture, and in return the employees will reflect that care back to the company.
The redefinition of compensation is essential for companies to strategically recruit and successfully retain employees today. Base salary, bonus, and benefits are indeed important foundations, but it is the intangible and non-financial elements that truly define total compensation and differentiate the good employers from the employers of choice.
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